Furniture industry leaders, initially stunned by Gov. Haley Barbour’s veto two months ago of an incentives bill that would have provided tax credits for the industry, say they’ve been treated unfairly and are looking for answers.
The incentives bill, which provided $2,000 in annual tax credits for cut-and-sew jobs, would have helped save the 4,500 remaining jobs in the state and potentially brought back another 1,500 from overseas, furniture executives said.
But after passing the state House and Senate by unanimous votes, the bill was vetoed by Barbour, who said the legislation would have cost the battered general fund budget about $11 million. He also said the state tax credit law was designed to encourage newer, higher-paying jobs and the furniture incentives bill did not do that.
“Tell that to the cut-and-sew operators who are averaging about $16.21 an hour,” said Ken Pruett, president of the Mississippi Furniture Association. “They are the backbone of the furniture industry, and while it might not seem a lot to some folks, it means a lot to them and their families.”
Pruett has been the voice for the association, but other MFA members are now speaking out.
One, Jim Sneed, CEO of Affordable Furniture, said he isn’t angry as much as he’s confused about what happened.
“We’ve been working on this for three or four years, and we’ve met with officials from all levels of state government who knew what we were doing,” he said. “Then we get ambushed. It’s just a shame. But I’m not a politician and I don’t want to be.”
What Sneed, Pruett and others are wondering is why there wasn’t an attempt by the Legislature to override Barbour’s veto.
“The bill sails through without dissent, but now nobody’s tried to override it,” Sneed said. “You tell me what’s going on. I know Haley Barbour is well-educated, highly intelligent and he knows politics a lot better than I do. Maybe he knows something we don’t.”
House Speaker Billy McCoy said he would have tried a veto override had the bill been a House bill. But since it was a Senate bill, McCoy said it would have had to be overridden there first.
Greg Roy, president of Lane Home Furnishings, said he, too, was puzzled and disappointed at what happened.
“This is something that we’re not going to let go of; it’s something we can’t let go,” he said. “My goal is to secure and create furniture jobs in north Mississippi. Sure, we have a foot in Asia and a foot in the United States for flexibility, but we want to keep and even bring back as many cut-and-sew jobs as we can here, and that bill would have helped do that.”
In his veto message, Barbour said there was a better way to help the industry, and that was through Foreign-Trade Zone manufacturing authority.
But an FTZ application can cost $200,000 to $250,000, furniture leaders say – a princely sum, especially for smaller manufacturers.
“The incentives would have helped a lot more a lot faster,” Pruett said. “No credit, no money would have been doled out until the companies could prove that they had those jobs. On top of that, there was a study done by Mississippi State (University) that showed there would have been a positive net gain in dollars from the incentives.
“But now we have to wait another year to try to bring this back up, and it’s another year that I’m afraid more jobs will be lost in the furniture industry.”
Dennis Seid/NEMS Daily Journal